Interpreting Software Engineering Work into Business Value: Lean Startup Basics

How Software Developer can leverage Lean Startup to shift to the Product Engineering

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Mar 31, 2025

The time has changed for engineers. We can no longer focus only on building but ignore business growth metrics. As more businesses are chasing revenue, engineers need to think beyond code and understand how our work impacts business growth.

In the guest post today, Max Piechota walks us through Lean Startup principles, a great way to tie your engineering work directly to revenue growth. He’ll even show you how a simple improvement, like optimizing a landing page, could be worth $25,000/month to the business.

Curious? Let’s dive in 😄

Let’s Start: Software Engineers Need to Know How to Drive Business Growth

I am skeptical about AI replacing programmers. I defend the thesis that the basics of software craftsmanship will always be important, even when working with LLMs. If you don't know them, you’re better off sticking to no-code/low-code solutions. Software craftsmanship is not just about coding; it’s about much more, and it will always hold value.

However, it is obvious that the way software engineers work is going to change. Since it is becoming easier to generate good code, we no longer need to spend as much time typing it (of course, the art of working with LLM-generated code is a whole new skill in itself). As a result, we have more time to focus on more important tasks: business analysis, design, architecture, and more.

To do these things the right way, we need to understand how they drive the business.

The emerging idea is the Product Engineer role, and Lean Startup provides the perfect foundation to dive in this direction.

What if you could prove to your manager that your work contributed $25,000/month in revenue growth to the business? Sounds interesting? Read the article to learn how you can do this.

What is Lean Startup

Short Cycle Time to Gather User Feedback

Lean Startup is a methodology developed by Eric Ries, based on his experiences as a software developer and entrepreneur. While building IMVU, he struggled with the traditional approach of long development cycles and full-featured launches before receiving real customer feedback—often leading to failure. Through experimentation, he found that rapid, iterative development and early user validation reduced risk and improved product-market fit. His insights were further validated when advising startups and corporations, where he observed the same pattern: businesses spent months or years building products without testing assumptions, leaving little room to pivot when they failed.

This led to the creation of Lean Startup, centered around the Build-Measure-Learn loop. Companies develop a minimum viable product (MVP), test it with users, gather feedback, and use that data to refine their direction. By prioritizing learning over blind execution, businesses can optimize resources and build products that truly meet customer needs.

Note that regardless the name, it does not just apply to the startups. In fact, every new initiative, even in enterprise grade companies, is just a startup. That's why this methodology applies to most of the products we are working on.

Minimal Waste, Rapid Experimentation, and Continuous Learning

Lean Startup is a methodology for building products and businesses with minimal waste, rapid experimentation, and continuous learning. It helps companies avoid the traditional, high-risk approach of fully developing a product before testing whether customers actually want it.

At its core, Lean Startup is about validated learning—systematically testing assumptions about a product, market, or business model before committing significant resources. Instead of relying on guesses, teams use real-world experiments to discover what works and what doesn’t.

The Core Principles of Lean Startup

1. Build-Measure-Learn Loop – Instead of spending months or years developing a full product, companies should build a Minimum Viable Product (MVP)—the simplest version of the idea that allows for learning. This MVP is tested with real users, data is gathered, and decisions are made based on actual feedback.

2. Validated Learning – Every product decision should be treated as a hypothesis to be tested. If an idea doesn’t perform as expected, teams pivot (change direction) or persevere (refine and improve the idea).

3. Pivot or Persevere – If an experiment reveals that an assumption was wrong, instead of continuing down a failing path, the company should adjust (pivot) its approach to something more promising.

4. Innovation Accounting – Instead of using vanity metrics (e.g., number of downloads), Lean Startup focuses on actionable metrics that measure actual customer engagement and product success.

The topic is very broad and it can't be all described in this short article. Eric Ries described the foundations in his book The Lean Startup. His podcast provides lot more insights and ideas coming from the Lean Startup approach. It even includes ideas about efficient management of the software teams effort.

Be Empowered to Calculate Your Impact on the Business Revenue

For software developers, Lean Startup is not just a business strategy—it has direct implications for their daily work.

In the emerging AI-driven era, it is more critical than ever for software developers to engage deeply in product experimentation. Developers who understand business and product fundamentals can challenge assumptions, propose better solutions, and ensure that engineering efforts are solving the right problems. A good developer doesn’t just implement features—they question whether a feature truly moves the needle on the most pressing business risks.

The Growth Factory: A Systematic Approach to Product Growth

The Growth Factory is a framework that treats customer growth as a structured, measurable system. Just like a well-optimized factory, a product should efficiently acquire, convert, and retain users while minimizing churn. The key to sustainable growth lies in continuously improving the factors that drive this system.

At a high level, the growth formula is:

Net Growth=(Acquisition×Activation×Conversion)+Recommendations−Churn

Each part of this formula represents a stage in the customer lifecycle, and software developers play a critical role in optimizing them.

To illustrate this, let's take a simplified example with numbers:

Example: Monthly Growth Breakdown

Imagine a SaaS company with the following monthly metrics:

1,000,000 visitors to the website
2% conversion rate (visitor → free trial user) → 20,000 free trial users
20% activation rate (trial users → actively using the product) → 4,000 active users
25% conversion rate (active users → paying customers) → 1,000 paying customers
$50 average revenue per user (ARPU)
5% monthly churn rate (customers leaving)

Revenue Calculation:

$1,000 paying customers×50 (ARPU)=50,000 USD/month$

How Software Developers Impact Growth

Now, let’s see what happens if developers improve just one factor—the landing page speed, increasing the visitor-to-trial conversion rate from 2% to 3% (by optimizing load times, reducing friction, etc.).

New monthly numbers:

1,000,000 visitors
3% conversion rate → 30,000 free trial users
20% activation rate → 6,000 active users
25% conversion rate → 1,500 paying customers
$50 ARPU
5% churn rate

New Revenue Calculation:

$1,500×50=75,000 USD/month$

That’s an increase of $25,000/month just from improving one factor! If developers also optimize onboarding, retention strategies, and referral mechanisms, the compounding effect can lead to even greater revenue gains.

Imagine how would your yearly performance assessment look like if you could prove your contribution to the business with such data.